AgdaPkt 2005-02-05 Budget - Laserfiche WebLink

Browse Search

5. (6.. L - j). Ii Option E is the least conservative of the four new possible options. This option involves taking 90% from reserves for each of the next three fiscal years, and 10% in budget reductions. Under this option, we project 12% reserves on June 2008. In the details of Option E, you can see that at the end of fiscal year 2007/2008, we still have a $1.9 million operating deficit and will run out of reserves before we can grow our way out. For this reason, staff is not recommending Option E. Option E Close deficit by Leaves 12% Reserve use of: 2005/2006 2006/2007 2007/2008 at June 2008 Reserves 90% 90% 90% Budget reduction 10% 10% 10% % Cut to all depts 0.48% 0.29% 0.29% In reviewing the options described above, Council may want to consider the following points in determining a revised Council direction for the amount of reserves to be used as compared to budget reductions: >- How optimistic do you feel that Redwood City will "grow" itself out of the budget deficit? >- Do we need to have a balanced budget by 2007/2008, even if you have reason to believe revenues and expenditures will be in line by 2008/2009? >- Given the assumptions about excess ERAF rebates from the County and software sales tax revenues, what level of risk do you have in deciding your policy if either or both of these revenues go away? Staff does not believe that Redwood City can completely grow out of this deficit without further budget reductions. We will run out of reserves before we can grow our way out. Therefore, the question is what balance of reserves and budget reductions make Council comfortable. From a public policy standpoint, staff recommends that Council adopt a policy that will put us in the range of Option C. Format and information need for Budget Hearings Fiscal year 2005/2006 is the second year of our two-year budget, therefore, staff will prepare the 2005/2006 proposed budget by exception, showing recommended reductions/changes to the budget that were approved in June 2004. As requested, staff will also provide a variety of alternative reductions should Council elect to add back a proposed reduction.